The Units of an Item Available for Sale During the Year

question 161

Essay

The units of an item available for sale during the year were as follows:
There are 50 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the ending inventory cost by (a) the first-in, first-out method, (b) the last-in, first-out method, and (c) the average cost method. Show your work.

---

Definitions:

Direct Labour-hours

Direct labour-hours refer to the amount of time spent by workers directly involved in the production process, used to allocate labour costs to units of output.

Machine-hours

A measure of production output or activity based on the number of hours machines are operating.

Product Diversity

The range and variety of products a company offers.

Parts Administration

Refers to the management and oversight of parts inventory, including ordering, stocking, and distributing components used in production or repair.